Saturday, September 5, 2015

Mere Involvement of a Foreign Government Does Not Fulfill the “Collateral Order” Criteria for an Interlocutory Appeal

Under the “collateral order”
doctrine, a non-final district court order may be appealable despite the “final
order” requirement of 28 U.S.C. § 1291, if certain criteria are met.In general, the order must be conclusive; it
must resolve an important issue apart from the merits; and it must be
effectively unreviewable on an appeal in the underlying action.

In United States of America v. Sinovel Wind Group Co., Ltd.,2015
U.S. App. LEXIS 12694 (7th Cir. July 23, 2015), the
Seventh Circuit Court of Appeals rejected application of the collateral order doctrine and found
that an appeal by a partially owned Chinese corporation lacked
jurisdiction.The court also rejected
use of a mandamus to obtain appellate review.

In June of 2013, the United States
Department of Justice attempted to serve Sinovel Wind Group Company
(“Sinovel”), a Chinese corporation with 18% government ownership, with a
criminal summons, by serving its wholly owned U.S. subsidiary, Sinovel USA, in
Texas.The summons
revealed that Sinovel had been indicted in the Western District of Wisconsin
for criminal copyright infringement and trade secret theft involving computer
software.
Sinovel specially appeared in
district court to file a motion to quash service of the summons, complaint and
indictment for lack of personal jurisdiction under applicable federal criminal
rules.It contended
that service on Sinovel USA was not the equivalent to service on Sinovel
itself.Id. at *4.The district
court found that Sinovel USA was the alter ego of Sinovel and denied the
motion.Id.Sinovel filed a notice of
appeal in September of 2014.It also
filed a petition for writ of mandamus directly with the Seventh Circuit.
In an opinion authored by Chief Judge Diane P.
Wood, the Seventh Circuit dismissed the appeal and denied the writ of mandamus.She first addressed appealability, noting
that the order appealed from was not “final” for purposes of 28 U.S.C. § 1291.After outlining the parameters
of the collateral order doctrine, she turned to Sinovel’s arguments for why the
district court order should be treated as a collateral order.
Sinovel basically argued the
importance of the district court ruling based upon the Chinese government’s
partial ownership.It further
contended that the order was practically unreviewable, at least until
conclusion of the criminal proceeding, and that prosecution of the case could
imperil foreign relations.

Chief Judge Wood pointed out, however, that
litigants routinely raise personal-jurisdiction objections that are not
reviewable until after the merits of the litigation have been resolved.She further noted that special
rights for foreign-government-owned corporations are not triggered under the
Foreign Sovereign Immunities Act unless the foreign government owns a majority
interest.In addition,
she observed that the fact that the Executive Branch, through the U.S.
Department of Justice, had made the decision to prosecute the case constituted
adequate consideration of the impact on foreign relations.
Ultimately, Chief Judge Wood found that the
district court’s jurisdiction decision was not unreviewable after final
judgment, and that the appeal therefore lacked jurisdiction.
Some of these considerations
overlapped with Wood’s evaluation of the petition for the writ of
mandamus.She noted, for example, that
such writs do not issue unless the petitioner has no other adequate remedy and
has demonstrated a “clear and indisputable” right to the relief sought.Wood ultimately found that no
compelling reason for immediate action existed here and that Sinovel would have
an adequate remedy in an appeal after final judgment.
Accordingly, the court dismissed the
appeal and denied the petition for a writ of mandamus.

Recommended Citation: Don R. Sampen,Mere Involvement of a Foreign Government Does Not Fulfill the “Collateral Order” Criteria for an Interlocutory Appeal, The Brief(September 5, 2015), http://applawyers-thebrief.blogspot.com/2015/09/mere-involvement-of-foreign-government.html#more.

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